Time is running out for all of those financial analysts, pundits, and economists who predicted a market correction, or worse in 2019. As always, there will be no accountability, nor any mention of the failure of these predictions when the same folks predict a correction in 2020 and then try and take credit for “calling the market.”
Still, for those of us who don’t shamble along to the daily clutter of the financial media looking for some sort of clicks, it can be a funny exercise to watch. Every year, I tell my self that I’m going to keep a running tally of the “predictions” so I can create an easy to view table showing the failure of the majority of predictions. Unfortunately, that would be a very time consuming task considering the sheer number of financial professionals who confidently make bold predictions to grab a day or two of headlines.
Don’t Listen To Predictions
The reality, of course, is that nobody really goes out and makes investment decisions or trades based upon some analyst at Dewey, Cheatum, and Howe calling a market top in Spring 2020. In the end, such predictions are really about media attention rather than actual investment making.
That doesn’t mean that investors shouldn’t make changes to their investing portfolio based upon data. The reality is that this expanding market is getting very old. The stock market never goes straight up, and while there is no rule that says there must be a recession, depression, or market correction, the reality is that there is usually some sort of downward movement, even if for a short period of time.
Time To Rebalance
What is a long-term investor with a solid, well-balanced, portfolio to do?
Easy.
As year-end approaches, it’s time to rebalance your portfolio. No need to listen to analysts. No need to predict the future. Just take a look at your portfolio, calculate your asset class, and investments percentages and buy and sell to put them back where they need to be.
Is Credit Karma legit or a scam?
Then, when the correction occurs next year (or will it be the year after that), your portfolio will be exactly what it should be. Don’t forget, the purpose of a well-balanced portfolio is to also ride out downturns in the market, not just to have exposure to the upside. If your portfolio is truly tuned to your goals and risk tolerance, then a market correction is nothing.
Most importantly, you will stay invested, and reap the profits, while all of the people calling for corrections are wrong.
Imagine if you had listed last year, or the year before that, or the year before that. Yes, there have been financial pros in the media saying the end is coming for long, and longer. Missing out on the last three or four years of gains would be more devastating to your portfolio than riding out a three or four year correction in the market.
Don’t forget. Long-term investing means knowing that up is always in the future.